Is AI Killing Software? — With Bret Taylor

Open AI Board Chair and Sierra CEO Brett Taylor joins us to talk about how AI is changing software whether the technology can push past its limits and to share some lessons from the world's top tech leaders. That's coming up right after this. This episode is brought to you by Qualcomm. Qualcomm is bringing intelligent computing everywhere. At every technological and flexion point, Qualcomm has been a trusted partner helping the world tackle its most important challenges. Qualcomm's leading-edge AI, high performance, low power computing, and unrivaled connectivity solutions have the power to build new ecosystems, transform industries, and improve the way we all experience the world. Can AI's most valuable use be in the industrial setting? I've been thinking about this question more and more after visiting IFS's Industrial Ex Unleashed event in New York City and getting a chance to speak with IFS CEO Mark Muffit. To give a clear example, Muffit told me that IFS is sending Boston Dynamics Spot Robots out for inspection, bringing that data back to the IFS nerve center, which then with the assistance of large language models can assign the right technician to examine areas that need attending. It's a fascinating frontier of the technology and I'm thankful to my partners at IFS for opening my eyes to it. To learn more, go to IFS.com. That's IFS.com. Welcome to Big Technology Podcast, a show for cool-headed and nuanced conversation of the tech world and beyond. We have a great show for you today. We're going to talk about how AI is changing software with Brett Taylor, the CEO of Sierra. For those of you who don't know Sierra, it was founded in 2023. It is an AI customer engagement platform that's doing 100 million in annual recurring revenue. 50% of its customers have revenue of more than 1 billion and 20% of its customers have revenue of more than 10 billion. So it's right at the center of everything happening in AI. And Brett is the perfect guest to discuss with us about how AI is changing software and where it's all going to lead what the future of the graphical user interfaces with the future of user interaction is. And of course, we're here at Qualcomm Space at Davos to break it all down. Brett, great to see you. Welcome to the show. Thanks for having me. Okay, so I want to speak with you first about the way that AI is changing software about vibe coding and whether we should buy into the hype. Let me just talk to you about two stories that came across my feed over the past day. Dave Clark, the former worldwide consumer CEO at Amazon, just wrote on LinkedIn. Between last night and today, I built a custom CRM that actually fits how we sell. We tried configuring and off the shelf CRM for our sales cycle. There are too many fields we don't need. We're missing the ones that we do need. It forces a pipeline flow that doesn't match reality. And we spend more time fighting the tool than using it. So I built what we needed. It took a night and a morning. I had another connection on LinkedIn. Tell me over the past two months. I rebuilt my company's business, the non-engineering parts of it, the processes using Claude code and I've never felt more empowered. I'm trying to figure out whether all these stories of people building their own custom software actually will lead to the change that many of them are promising or whether there's actual meat behind this. You know, is Dave Clark's CRM going to fall apart in a week and it was just a nice post for LinkedIn engagement or something real actually happening here? I'm quite optimistic about this trend. I actually think the term vibe coding will be like information superhighway where it's a term we don't use in the future because the idea that your software is something that you can change yourself will be something we expect rather than a novel concept. I have two things that sound contradictory but I don't think they are. So first is most of the cost of software is in maintaining it not building it and that's why most people would prefer to buy a solution off the shelf because you want to amortize the cost of maintaining software among thousands of clients and not have everyone bear. Just think your ERP system and a new accounting standard comes out. If every company in the world has to go vibe code that new accounting standard someone's going to get it wrong. Hold on. I've heard this before but won't the AI just be like okay I'm picking that out of the internet that's the new standard now I put it in. It may but I think the bigger point I was going to make is right now I think we're just imagining vibe coding or existing solutions. If you think of something like a CRM it's a bunch of forms and fields in a web browser. I'm not sure that's even the future of software. The future of software is agents. So rather than having a web browser with forms and fields that we click on we will delegate tasks to agents that will operate against the database somewhat autonomously. So I think the interesting thing is I think everyone's looking at all the software we use and say how fast could I vibe code that. I wonder if it's the wrong question because I actually think the more disruptive thing happened to software is the software used today will not be the software we use tomorrow. The form factor will be different. The business models will be different. The consumption patterns will be different. If you're generating leads and opportunities for your sales team and agent will do that. If you're essentially auditing your financials in your ERP system and AI agent will do that. Who's making those agents is the question and will you buy those agents off the shelf or build them yourself and I think that's still an open question. Whether you can vibe code a cred app in a web browser I think is maybe an interesting question on Twitter but I don't think it's the most interesting question in software. All right let's just unpack this a bit. So CRM or customer relationship management technology. If you have one of those software tools that goes from the graphic user user user interface to a chatbot what does the interaction look like and isn't it valuable to have I mean not to stand up for dashboards but isn't it valuable to have those dashboards where you can basically see what's going on as opposed to like have to like type into a chatbot what's going on. I don't fully see how chat and agents can replace the software stack that exists today. The word agent comes from agency and it just means AI has some ability to autonomously reason and make decisions and so it doesn't mean the concept of a dashboard will go away but perhaps everyone at your organization will have a different dashboard your head of sales, your head of sales operations the CEO probably all very different things they're interested in so every morning that agent might reach out to you and give you just the information you need. It's a new form of dashboard right but it's custom for every individual and the form factor of the software underneath is actually very different because if you think about what it means to craft a dashboard it's a lot of like database joins and things like that if you think about giving an AI access all to all the information it needs to give you personal insights it's very very very different and I think that's why whether it's the birth of the web browser or the smartphone or now large language models and AI it's a disruptive moment in technology because the incumbent software players their advantages all the sudden start to look a little bit like disadvantages and it doesn't mean they won't all pivot by the way but it opens the door for all say AI native companies who are building software sort of native to that form factor so I do think it will change I think the importance of dashboards will go down a point of a dashboard so a human can stare at it and derive some insights I think that probably AI can serve a very meaningful role in deriving insights from your data and it's staring at a bunch of colorful lines on a screen is the best we have I'm not sure that's true it doesn't mean all dashboards are going away but you have to imagine that these AI agents are becoming progressively more intelligent than you and if you're not relying on it to help you know find insights in that data that you were previously staring at in a dashboard your competitors probably are so I think a lot is going to change and I think the interesting thing in Silicon Valley any use you said I've been in this industry for a couple of decades is it's a race the incumbents need to transform themselves the disruptors or insurgents or whatever term you want to use are trying to compete to create AI native applications in each of these areas will the you know insurgents and and upstarts become any incumbents before the incumbents you know transform themselves and I don't think it's a foregone conclusion for any one of the incumbents but I think it's a really fun time to be in this industry. All right so as the words were coming out of my mouth I was saying I can't believe I'm standing up for dashboards and just note to self when I'm doing podcasts I'm not going to stop stand up for dashboards anymore terrible decision I hear you on that front but let's let's talk a little bit then about about the disruptive power to today's incumbents right so you talked a little bit about how businesses might disrupt other businesses I think there's a belief now that it's individuals with these tools are going to be able to build their own instances and that will be the threat to incumbent software platforms so reading between the lines of what you just said I don't think you really believe that it is going to be an individual building their own custom technology you still think that companies need to be able to do this. It may be true you know essentially I think it's very hard to predict the second order effects of the marginal cost of software development going down so dramatically but it's interesting so I was for our first customer conference at Sierra I was doing research and I was looking up in the way back machine old wired articles and I found one from I think it was 1997 and the article was about banks failing to launch websites with login forms and spending tens of millions of dollars with consulting companies and how hard it was to go from read only to enabling someone to log in to like check their balance it's trivial now you could vibe could that probably during the course of this podcast yeah you know most people when they're starting a commerce store front don't start from scratch they go to Shopify why is that well you know well making a website was incredibly difficult 1994 something like a Shopify just adds more and more capabilities maybe it helps you with fulfillment maybe it integrates all the other systems you use for delivery CRM maybe it helps you acquire ads to drive traffic to each of your listings I think as AI becomes easier to make you just make software that's more and more high leverage and more and more valuable and at the end of the day most companies aren't software companies Dave Clark you know is one of the great technologists of the world and grew up at amazon and understand software deeply if you're a you know CPG company you know do you have that kind of skill at your organization maybe you do and maybe you don't but I think at the end of the day most companies don't want to be software companies they want to buy solutions to their problems and if there's an opportunity to do that I think it's actually smart I don't think you should be in the business of maintaining software that's not the core of what you do and I think that's true of most businesses I just to give you an example in tech when I started my first company we built our own servers and put them in a collocation facility now we have no data centers we just use the cloud like every other startup in the world it's an entire department that isn't at our company and it means we could be more self-actualized in what we do I think the same should be true of most companies so I'm hopeful that actually in the future the form factor of acquiring software will be acquiring agents that will be I believe a different business model which is outcomes based pricing rather than just paying for the privilege of using that software and I think there will still be software companies in the future I may be wrong I just think right now we lack the imagination to imagine what this software does and we're just projecting all this technology the lens of what we currently use which is not what we'll be using in the future so the market that if you look at the index funds the market has dropped software like 10% this year software bundles is that the market misunderstanding what's happening because basically it's been in reaction to cloud code and cloud co-work so is it the market misunderstanding what's happening or is the market seeing the seed of something which is that there's something big changing in software and if people can do this in their backyards or in their basements as easily as it's taken you know companies years to build then there's going to be a shift somewhere I think the stock market wonders it's sort of funny to talk about the stock market as a person but the market we're talking about chatbots as people so let's do it let's answer more if I as both I think the stock market doesn't know which of those incumbents will make the transition and I think that's what the market is unsure about and you know I think it's actually you look at the multiples on AI stocks and we can debate what that is versus software stocks it's the haves and have nots right and I think it's largely the markets wondering which of these companies will make the transition if you look back at the transition to the cloud you know Microsoft went through fits and starts but it eventually came out quite strong but it wasn't obvious for a period that they were companies like seabull systems which most of your listeners may not even remember but that was the number one CRM before Salesforce existed did not make the transition and I think if you look at all the incumbent platforms out there my strong intuition as people are saying yeah there's a there's a play there these are strong companies you know will they actually pivot I think the interesting maybe counter intuitive point that I would make is I think business model transitions are harder than technology transitions I think it was harder for most on premises software companies to move to radical subscription revenue than it was to necessarily make something that ran in a web browser it's a very different business model revenue recognition even sales cycle from selling you know Windows 95 and then Windows 98 to just have a you know always on system I would argue that actually I think agents will go the way of outcomes based pricing where you know for example at CIRA we charge per resolved case for customer service agents I think if you made an agent to audit your financials you should pay per audit that's a very different form factor as well and I think companies going through these transitions have to disrupt their technology stack to disrupt their business model it may even mean that the revenue dips for a period as they come back out and any public company CEO will tell you that's easier said than done and so I think that will actually be one of the more interesting stories in 10 years and we look back and say who made the transition and who didn't all right let's end this talking about one of your former employers you were the co CEO of Salesforce we started talking about CRM so let's end this segment talking about CRM obviously Salesforce is a place where you know sales people lot there there's a call information and then you know their leaders can see how they're doing and judge the pipeline and you know make predictions on the quarter the Salesforce become chatbot or what is the future of a company like that well Salesforce is first of all marks a great leader so you're gonna pick like companies who can make the transition founder led great leaders so never count him out at all it's also a multi product company I mean the largest product in Salesforce is portfolio at least when I was there was Salesforce Service Cloud they bought Slack, Tableau, MuleSoft and so I think if you think about Salesforce is just managing leads and opportunities it's probably too narrow and so you know Salesforce has all these assets and the question is what is the quote-unquote "agentic manifestation" of the value proposition they provide and you know I'm not close enough to them anymore to really say black and white but they have a lot of great assets great leadership to do it right but that distance is valuable because you can give us like some perspective on what you think a company like that will look like well I mean it's the same of all whether it's service now SAP Salesforce Adobe you have to say there's a framework from Clayton Christian so any wrote this book competing against luck called jobs to be done what job does your customer hire the software to do and it's not to edit a field and a database it's to generate leads it's to manage pipeline it's whatever it is and if you imagine that job through the lens of an AI agent what is the purest form of that technology and I'm not sure I know the answers to all those questions because it hasn't been my job to think about it anymore and I've been working on Sierra but that's the question is can you make that transition as a value proposition and then say what is the business model for that new value proposition and and as I said it's a race because there's for each of everything I said I guarantee there's five startups trying to compete for that right now as well and it's a question of it's the classic innovators dilemma so taking a step back we'll talk about enterprise by the way very interesting what's happening enterprise so I think it's worth spending the time talking about it but let's let's take a step back and talk about consumer for a moment if the internet was to just start up today from scratch and knowing that we have conversational AI and large language models what does it look like like do we have a Facebook and an Amazon and a Google or is it everything just mediated by a chat about what does the internet look like if it just starts from zero today it's hard for me to imagine starting from zero today because so much of what we have and chat GBT was a byproduct of the internet existing but we're for the sake of the thought exercise we're just burning it down and starting burning it out at starting for scotch so first I'll say I think when when I was in college when I started college the front door to the internet were portals so Yahoo and Excite and the like and it was sort of a quaint time you could list every website it was worth reading in a directory like the yellow pages very quickly I think Google launched in 1998 and then sort of became took over on Stanford campus and then you know by the early 2000s most people were googling things and portals were didn't go away but were no longer the front door for most people's experiences I think chat GPT is already the front door for the internet for many people and I would say if you look at like chat GPT Gemini and the like I think your personal AI agent will be your front door to the internet and I say that to answer your question because I think it really changes the way you use the internet rather than getting 10 blue links and clicking on them you might delegate some of that responsibility to your agent to maybe I when I planned my family vacation to Copenhagen last year chat GPT did almost all the research for me and so it really changes your relationship because it changed your relationship with all the content that you know chat GPT looked at I didn't book in the Airbnb but I probably would have if it had let me so I think we're moving from a world of you know just you know clicking on links to companies having agents this is what Sierra does we help companies like Sign-On Series XM direct to be make AI agents can talk to their customers and consumers over the next three or four years will have their own agents and that's a very huge change because I think it's quite personal but what will you delegate to your agent you know some things you'll probably care a lot about some things you may say hey just go book that hotel for me on my business trip if you're going on a family vacation you might spend a little more my time looking at the listings but in those moments where you're delegating basically decision-making to your agent it really changes a lot of the mechanics and economics of the internet SEO SEO all these things that have been awesome of optimized towards persuasion of humans all of a sudden when this brand new world so I think the internet's going to change a lot I think it's largely going to be very consumer friendly just because we can accomplish more with less thanks to the prevalence of agents but will change pricing strategies marketing strategies discovery in ways that I can't can't leave in someone sort of in the middle of it I can't quite predict right now but you can sort of see the change coming even if you don't see the end of it so much of the web and so much of the internet is premised on us visiting things publications if you have to visit them that's the way the economics work site like Amazon right that you want they want you to visit because they get the data and then they can tailor the experience to you if you're not visiting sites anymore then does the math fall apart how does it work I think business models will change with technology you know I think the advertising supported internet was a byproduct of the distribution of the internet where a lot of companies said hey rather than having a payment as a gate to content you know providing it for free and providing ads is a better business model not all publications made that to in fact somewhat interesting enough many of the healthiest publications didn't which is interesting I think certainly AI agents and consumer agents will drive similar changes to business models I'm not sure what they are yet to be honest with you I still think fundamentally it's you know a market where people it's like demand generation demand fulfillment you know it's essentially finding people who might in the future be interested in your product and making sure they're aware of you this is largely happening on like TikTok and Instagram and Facebook today demand fulfillment which is largely happening on you know Google and Amazon today with the prevalence of agents what is the new world of demand generation how do you make your products known to you but also maybe to your agent which is a funny thing to say and then when you are actually transacting what is sort of the paid equivalent of that and I think both of those are nascent I don't think we know what they are but I think the the economy or like I'll say the digital economy will be fine it's going to change things it's just going to make things that used to be really profitable less so but I think just like the whether it was the advent of the internet or the newsfeed you know this is not the even the fourth time over the past decade that there has been changes to that economy and I think entrepreneurs and innovators will figure it out and it will I think will be great I just don't know exactly what it will look like yeah yeah I'm struck hearing your answers that a you think a lot will change and b it's still so uncertain what will actually change we are in into of this nine Indian game yeah in my opinion so actually you've been play well you've been playing let's say it's a double header you were definitely on the field for the first nine innings of of the last the last game because you know if you look through internet history you've just been at the center of so many of these really important moments you know it's amazing I keep seeing the name Brett Taylor whenever there's a big a new story so it's great to be able to speak with you just for our audience and I'm sure many of them know this you were the Twitter board chair during the sale to Elon Musk you became the open AI board chair upon Sam Altman's return after he was fired over that weekend you were the co CEO of Salesforce with Mark Benioff like we spoke about you're the Facebook CTO as the company moved to mobile and you built Google Maps so let's just introduce you to our audience on this one how did you end up in the middle of so much tech history. Gladden for punishment I'm just kidding I one of my favorite quotes is attributed to Alan Kay and I haven't actually verified it from the Alan Kay was a researcher at Xerox Park and he said the best way to predict the future is to invent it and I love it just because I think it captures the mix of optimism and I'd say this sort of imperative I feel when there's a really compelling new technology to get my hands on it and help shape it as opposed to observe it passively from the sidelines it's interesting you talk about those different trends because yeah I started my career at Google went through both social and mobile at Facebook and then you know learned enterprise software Salesforce at Sierra we help companies build AI agents for their customer experience so think not having to wait on hold when you call up a serious XM or you know even helping people refinance their home with with a rocket mortgage agent part of our value proposition is actually reflects that history we say if we're like 1994 we'd be telling everyone why they needed a website and if it were 2015 I guess I'd say here's why you should have a mobile application and now it's 2026 and we say you need an AI agent and your AI agent is going to be your digital front door and most of your customer interactions will happen via your AI agent not by from your mobile app or your website the end of the exist in those platforms and I so it's really interesting just because my own personal history sort of tied up what I'm doing now but it's so interesting because if you look at I love the history of computers and yeah I think Microsoft's mission at one point was to put a PC on every desktop I think we only reached about two billion PCs so certainly maybe reached that mission in the western world but certainly not in the developed world then the internet was developed and connected those PCs and then thanks to Steve Jobs and then obviously Android's evolution of that technology we have more smartphones than people now and they're all connected to the internet but they're all building on top of one another like the smartphone would not have been the smartphone without the internet and the internet wouldn't have existed without the PC and now you have AI and it's building on pop of all of this and so what's so interesting about this like at least the way you articulated my career is it feels like the sense of acceleration like each of these new waves of technology is adopted seemingly five or tens times faster than the previous generation because they're all compounded and that's what's so exciting about right now we were talking about before this show just I've never felt a pace of change more rapid than the moment right now for you I mean you've you've the timing has been really impeccable do you have like I mean when something's shifting like when the shift let's say just from search to social happen a lot of people might have seen something happening but there was still I think in the general public a feeling of like I don't know about social media I don't want to put my whole you know life on the internet but you're like I want to be the CTO Facebook what do you think gave you that sort of gives you that sense of timing and the decision to move and go all in on this nascent thing because you've been right about it a lot of times I think some of it is just luck there's no doubt I mean I think it's arrogant to say otherwise all this actually is funny I was reflecting on this well my first job is at Google which has to be one of the best first jobs of all time that's job why the dot com bubble adverse so the job fair was like a bunch of tumbleweed and like Microsoft and Google and I was like I'd prefer a Google and I knew Marissa Meyer had gone to work there so just you know I say dumb luck but it wasn't exactly I always wonder if I had started my career in 1999 when I've been at Pets.com you know I hope not but I don't know I didn't have the I just graduated the right time I just want to say we've done two shows at this space and that's the second Pets.com reference we've had I feel bad for them they're the cool sock puppet good for them I I would say if there's one thing that is you know I'm curious I really am curious about new technologies I think it is hard to embrace change in your own business or change in technology if you immediately are reflexively negative about anything that you see I encourage people who are skeptical about a technology to find someone whose opinion that you trust who has a different opinion than you have lunch or have dinner with them and say convince me that I'm wrong and I've done this with a few different technologies that I was skeptical about and I'd find you know a fellow entrepreneur that was really bullish on it and I'd say I just want to I want to understand what you see and I say that just because I not every hyped technology is you know worth the hype but there's usually if smart people are interested in it there's usually something really important that they see and I think if you have that curiosity you'll be more likely to be able to apply what's good about it to your business or to your life and I definitely have that my joke I've never met a pessimistic entrepreneur and I'm definitely not one either so it's interesting because we've just talked about these big shifts in technology search to social desktop to mobile and now all of it to AI there's some people let's say AI is the last invention that there won't be another shift after this do you believe that not at all really I I always I like to do the thought exercise so the United States was founded 1776 at the time I don't know what percentage of our economy was agrarian but I'm guessing it was like 95% of the country were farmers and I always imagined taking I don't know who the most tech savvy founding father was but Benjamin Franklin maybe I don't know and try if he were teleported right here in between us first of all that would be a little cool but secondly like how long would it take him just to understand where all the food comes from probably a really long time because we've been automating essentially agriculture food distribution for so long we just take it for granted right now I think you know we often see new technologies and see what it displaces that we currently do but we create an economy and a culture around our technology not the other way around and so in those past you know 300 years or something we've made power relatively abundant we've made food abundant we've made transportation relatively abundant and you know just think about the fact that both of us flew here on airplanes you know 24 hours ago and we're broadcasting over the internet it's mind blowing right we don't think of it as mind blowing but as mind blowing I think we just lack the imagination I think that's delightful I'm excited that in my lifetime hopefully 25 years from now there will be things that today I wouldn't understand and jobs I don't understand technologies that are hopefully discovered by AI and I think a lot of people look at AI because it can do things that we can and it somehow thinks it takes away from our humanity and I just disagree just like the card didn't take away from the horse it's just different and I think I'm just optimistic about it I don't mean there won't be meaningful disruptions technology is hard and we just talked about I self-identify as a software engineer and even over the past four months that job has changed dramatically the skills that made me what I am are less valuable now than they were you know four years ago but I'm excited for that because I'm excited for the progress and means for humanity all right let's talk about Sierra so your seven quarters in which is wild because you're already doing 100 million an annual occurring revenue you have 50% of your customers have more than a billion and revenue and 20% of your customers have more than 10 billion in revenue so you are selling in AI customer engagement you're selling into very big companies and you're getting very big deals some of your customers like Sirius XM will actually have your your platform take action right so this is not chatbot I think this is important to say this is not chatbot it's agentic it's agents it's when my satellite radio isn't working the AI will reset it for me and I'll be able to listen again where that typically would have taken and by the way that that AI agents sending the signal up to a satellite in space which is communicating with your car no person is that no person involved AI agents talking to satellites like and that's just a normal thing that we do now in 2026 it's pretty awesome and so my question because that is that's a big deal right that that requires Sirius to say all right Brett go ahead and let your AI technology which is probabilistic right go ahead and send a signal to our satellites and we're going to trust everything is good and that to me is a big question that I have about Sierra which is there's been so much discussion about this AI rollout and what's you know going right and wrong and and what's taken the AI projects from pilot into production and you've got it in production with these big companies that are trusting you with big actions how have you gotten them to trust you with this stuff I think it all starts with the customer and the consumer yeah you were implying some of the risks of AI which I'll talk about but if you're a survey your listeners and survey their sentiment about waiting on hold it would surprise me if you could find one person who had a positive experience with that I think we spend like years of our life waiting on hold and the reason for is somewhat like a mix of sort of business and technical until recently the phone line was analogues there was no way to build a digital experience there so someone did call you on the phone you had to staff a call center to answer it and if you want to not wait on hold you had to overstaff that call center by with people be sitting around most of the time doing nothing which just cost a lot of money and if you think of a consumer brand and let's say your average revenue per customer every month is $10 that might be less than the cost of a single phone call so you actually can't afford for most businesses literally can't afford to have a phone conversation with your customers but now you can because you can actually have an AI agent pick up the phone you don't need to wait on hold it could be multi-lingual it can have perfect access to your systems it can help you find if you know the retailer next in the UK it can help you know find your order if you if you order food in London and deliver it can help you whether you're a driver or a consumer of that signal health insurance we went live with them in less than two months with Sierra and it can help you understand your benefits process claims all these things are just really useful and and I think because consumers don't want to wait and they would like an answer now and because you can do things with this technology because we have essentially digitized the last analog channel which is the telephone it's unlocking new business models as well one of my favorite examples this is rocket mortgage which for those of you not from the states is I think the largest consumer or a mortgage originator in the states if you go to redfin.com you can use an AI agent built on Sierra to find a home you can go then rocket.com and finance that home and get a mortgage and then with their new mr. Porter acquisition service that loan all with the AI agents it's amazing right right and this is this is the pain right that you're solving but I want to hear a little bit more about the the discussions that you have with them the fact that and in the persuasion where you've said trust our technology they've looked at the technology is the technology good enough now because there was some doubts that it could handle such complex things so talk a little bit about about that how have you gotten them to trust Sierra with these actions because we all agree that the pain is real yeah well so I'll start with actually I'm an important thing to ground ourselves no pun intended and which is we're humans make a lot of mistakes too so if you have an associate talking to your customers the odds that every associate is going to do everything perfectly is essentially zero and I think we just have a higher expectation of computers which is understandable but you know what these AI agents are doing aren't necessarily doing something that was previously perfect and I think a lot of companies understand that and if you if for anyone who has a large sales team or customer service team you know exactly what I'm talking about because you've gotten the phone calls from a client where it didn't go well so first I would actually argue counter intuitively AI agents are actually more reliable than most of the systems that they replace it doesn't mean they're perfect by the way they're just more perfect than the very fallible human operation systems that that preceded them and the second thing is essentially what we do at Sierra is try to essentially put more robustness and determinism around these inherently non-deterministic systems one of the best ways we do that sort of technology called simulations so all of our clients have a database of usually hundreds or sometimes even thousands of simulated conversations that they run before every release of their agent that simulates everything from an angry customer to an unusual case to background noise that's right and it can simulate languages accents background noise and it means that essentially before your agent goes live your customers aren't finding all the flaws your simulations are for those engineers listening you can think of it as almost over aggression test suite for your agent we also use AI monitors so how can you use AI to monitor the AI to look for things like hallucinations was it saying something that wasn't in the data presented to it or even subtle things like was the AI being frustrating to your customer was it being repetitive and it enables you to you know the joke that we say in the office is the solution to every problem in AI is more AI and there's probably a limit to that but we really believe it and what's really fun about that is you know with AI monitors you can monitor all conversations so you can go well beyond the scale of your operations teams and even where you do want people looking at the conversations you can put the needles at the top of the haystack so your operations teams are just looking at the conversation that have potential issues and so really creating a virtuous cycle of you know testing monitoring and human review to create what we hope is a virtuous cycle so every day that your agent is live it's more robust than the day before it doesn't mean it's perfect but it's really you know essentially I'll just go back to like the way softwares evolved over my career and rough I think it was like the early 2000s there's that outlook worm that took over like everyone's desktop and there's before there were CSOs and most companies since then we've developed the role of the CSO we've formalized the software development lifecycle which is essentially a methodology to make software robust we've essentially an AI agent development have this idea of an agent development lifecycle the same idea which is don't expect perfection but with this methodology and the product and the platform we've built you can make a robust agent and you can make it reliable and you can make it something that becomes more trustworthy over time is what you're saying then that with these AI agents it's not like self-driving cars right so self-driving for instance was it was I don't want to say trivial but the company's got it to 95% pretty fast and getting from 95 to 100 has been very difficult and we still don't have it rolled out even though it seems like there's been progress that's been made but if you make one mistake there you know it's it's catastrophic whereas do you think that there's much more of a willingness to allow some errors with AI agents and the type of solution that you provide because your your baseline is these fallible human workers and if your if you make a couple fewer mistakes with AI you're you're still doing a better job I'm not sure there's a black quite answer to that I mean certainly the reason why Syra has become one of the fastest growing enterprise software companies of all time is because the technology is ready for many companies and many applications but it doesn't mean it's ready for all the you know challenge of self-driving cars is that the consequences of being wrong can be human injury so it's rightfully sort of held to a very very high standard I might argue held to a higher standard than human drivers which and it's sure it is sure it's sure we might be safer if regulators a lot of trouble out sooner but it's a whole separate discussion what's interesting about the technology that we make it's here is it's not you don't have to use it for all applications but if you think about recovering your password or finding your order or even finding a healthcare provider in this the network of your health insurance company AI agents can do that now and that's what our you know that's why we're being pulled by the largest healthcare financial services telecommunications and consumer companies in the world right it doesn't mean it's ready for everything yet but that's that's why we exist you know if we were sitting here three or four years so now I'll tell you the more and more mission critical applications that will be ready for and just take going back to where we started a conversation of vibe coding it's probably very safe for you to vibe code your blog right now should you vibe code the login system for a bank right now probably wouldn't recommend it yeah exactly it's that's so it doesn't and could you ask is vibe coding ready for production what production application and I think that's worth that stage of innovation right now where the technology is immature no one's claiming it's perfect but the idea that you should wait until it's perfect to do anything I think is a death sentence for companies who have that that mentality I think the better question is what processes that my company are ready for the current side of technologies recognizing by the way that it's not a question of if it will make a mistake but when it does how do you detect it how do you mitigate it all the controls that you have in place and I would make the argument that actually for most processes and most companies the technology is ready today and put another way we paused innovation at the foundation model layer we would still have I think trillions of dollars of value in the economy with current technology okay I want to I have so many more questions to ask we have 20 minutes left so let's take a break and we're going to come back right after this and we're here with Brett Taylor he's the CEO of Sierra chair of open AI interesting thing you said before the break Brett that's SIGNA I think rolled out in what a couple of months with you guys there is a whole industry of consultants that integrate systems and are basically connecting business processes and they take a year and they usually do it like 50% effective what's going to happen in consultants in this world consultants is a broad category you know you have strategic management consultants you have systems integrators you have you know outsourcing firms you know that essentially can like build software on your behalf I think all of them will have different impacts on this technology the first principles do I have is software engineering agents are bringing down the cost of developing software it's not going to go to zero but it's you know it's going from extremely expensive to relatively inexpensive and that's a huge change and so where you had a dynamic where a company was outsourcing software development to save costs the cost of the AI agent might be less than the cost of the outsourced I'll say resource even so it's somewhat a dehumanizing term but often the term used in the industry now I'll disrupt that part of the industry but behind every technology project is a business transformation you know if you're digitizing part of your business the software is a means to the not the end to itself and I think most consultants would say the change management that they participate in the actual advice on how to do that and how to be competitive has always been the more valuable part of what they do so I think a lot of these consulting firms will probably need to transition away from you know the billable hours of the hands on the keyboard and more towards change management strategic consultant and I think they'll have some innate value I think the having an outside in perspective is inherently valuable I think for a management team so I don't think it's going to go away but you know what is it that you're buying for them and how they provided I think probably will change a lot and by the way as we also started the software industries also changing a lot and so there's a lot of unknowns right now but I think it's going to skew towards higher and higher leverage types of consulting just given the commoditization of producing software which is obviously happening with AI okay so you're the chair of open AI I want to talk a little bit about open AI and also like the broader foundational technology underneath first of all they just decided that they're going to start showing ads I think the funniest tweet that I saw in response to this was like AGI is nowhere close because if open AI thinks that they have to show you ads as opposed to like you know redevelop the way the world works and it's going to be a while what's your response to that so if you look at open AI's business model kind of three pillars the first is chat GPT monetize through subscriptions today and this is where Fiji announced where the ads principles were where the plans are to introduce some monetization component to that then you have the API which companies are using to essentially build applications on top of these models and then you have agents which a lot probably the most meaningful of that is codex which is a software engineering agent I am excited about developing all of those business models because I mean as has been covered by many people the cost of training these models and the cost of inference is incredibly high and so to really make open AI sustainable towards our mission to ensure that artificial general intelligence benefits humanity we need a sustainable business and that really means you know monetizing the incredible intelligent asset that we're producing which is these models I also having been a number of companies both Google and Facebook that effectively developed that's platforms I think I think it's quite complimentary to these free offerings I yeah I was at Google when we launched AdWords and the before and after of the monetization for the internet was it was strictly better on the other side of it because the ads were complemented what you search for and it actually provided actually a lot of value to consumers so I think there's always an art form because you just can't reduce trust you need the chat GBG to be agent acting on your behalf and I'm confident the team can do it in a way that you know compliments that experience rather than it competes with it and I'm excited for the opportunity but the argument that if there were real great economic value on the other side of the rainbow that their ads would be unnecessary I don't buy that just because it's unclear like you know just just because open AI is making this technology doesn't mean we're like monetizing all the benefits to the economy either and so you know I was just reading I don't know if this is true but I just was reading on acts that a mathematician prove one of the unproven conjectures using GBT 5.2 I hope it's true I haven't personally verified it that's that's amazing that is progress for humanity but it's not like you know send us the commission I don't think there was a commission on it and so I the mission hasn't changed and I think this is just a way of you know growing the open AI business so we can continue to finance what I think is the greatest research lab in the world okay let's talk about that research so opening AI spending a lot of money we won't get into the ROI discussion I feel like that's been we've had that on this show a lot but I want to talk a little bit about what the what the argument would be for this technology starting to slow down a year ago there was a discussion about whether the models were going to hit a wall clearly they haven't hit a wall but you could argue that they are getting better through through tricks for instance a model can learn something by going to the internet and searching for it but that doesn't get baked into the core of the model so it's using these tricks or some people call it scaffold in orchestration to get most of these improvements and it's not like the underlying technology is getting that much faster that's the argument and so then maybe eventually the tricks will run out what do you think about that um first of all I think all all credit all criticisms important to listen to if you're in science and you want to make progress my take first of all I think there's a one of the nuanced aspects of the progress we've seen particularly this past year is the models have gotten a lot more intelligent they may have been sufficiently intelligent like a year ago for most consumer applications like my trip planning to Copenhagen I'm not sure how much the reasoning capabilities of GPT-5-2 would have benefited that trip planning we were at peak travel agent I'm being a little facetious here but if you're using yeah well but if you're using codex to write software for you the difference between GPT-5 and GPT-5-2 was huge and you can see this online just all the developers using it because reasoning capabilities for authoring complex software is incredibly valuable so I think one of the dynamics that's sort of playing out particularly for people using chat GPT and Gemini for I'll say a casual everyday use which most of us are at this point is a lot of the model improvements are not necessarily visible for those class of applications but incredibly visible if you're using it to say develop software or to prove an unproven math conjecture so that's an interesting dynamic which is and I think it's going to probably over the next few years amplify which is for a given task the models from last year are sufficient and the new models will be necessary to achieve some semblance of superintelligence or artificial general intelligence but we're actually at sufficient intelligence for a lot of different applications and I think that's why it's really important when you're judging progress and cost and all these things that we'll actually probably have to start looking at through the lens of applications if you're doing pharmaceutical like therapy discovery you probably care a lot about the reasoning capabilities if you're planning to trip a little less so to your point on accessing tools I actually think this is strictly a positive I think that one of the big breakthroughs with AI agents will be long-running tasks and and I think that using writing code searching the internet I think is great I think it enables whenever you whether or not whatever your training process is the internet changes on a second by second basis and having an AI agent that can respond to that is very important but more importantly it can access a private database it can access you know structured you know it can access a system that's looking at a particular strand of DNA whatever you might want to do so Tullios is incredibly important probably the one thing that I think in AI circles and I'm not an AI researcher though is to achieve true AGI what we need reinforcement learning from the observations that this model makes which most of the mainstream models don't do I'm not sure about that and there's a really healthy debate about that but I I am I don't characterize this Tullios as like a hack I think it's actually a structural input to long-running agents which will probably be what we need to to create something close to AGI okay so we've talked a little bit about your personal history I just want to end here with a bit of a lightning round where we can talk about some of the leaders in the tech world that you've worked with they're going to be big names that a lot of our audience will know just give us one thing that you've learned from each and I want to start with Mark Benioff. Mark was a major amazing at creating an ecosystem and a community around a company I was really inspired by my first dream force and just seeing all the people that showed up there and realizing there's a difference between having customers and having a community and some of that stuff isn't that I took away from him. All right Mark Zuckerberg. Mark Zuckerberg was probably the longest longest term thinker I ever worked with we used to go on long walks around Palo Alto talking about strategy and every time I thought I was thinking in long-term he was thinking about two times longer than me and I've tried to model that now it's like how am I thinking in long-term enough and I think you can see it in just the Facebook and Metta's performance over the past decade like he's always looking at the horizon beyond the horizon which I deeply admire. Speaking of Zuckerberg's long-term thinking do you think this big bet that they're making on artificial intelligence right I mean they've poached many of the top engineers from the company that you're the boar chair of. Do you think that's his belief that we are going to stop communicating with our human friends online and we'll start communicating with our digital friends instead? I think we're going to be communicating with our friends for a long time I think this is just I mean Mark has a lot of conviction and is willing to put his money where his mouth is and I think that's a real animal trait for a CEO so I think that's all it is I don't think it's an indictment on human relationships. Okay I will take the other side of that. I think we are we are many of us are I mean we have this like it's interesting we have this loneliness crisis and into the void is coming these bots that will tell you how great you are remember everything about you look out for your best interests. I actually am worried about sycophantic AI I think it is some of the science I guess has been partially debunked but I I like the anxious generation and it resonated with me just the negative impact of smartphones and social media particularly on young people and I think with any of these new technologies there's a risk of addictiveness and and you know particularly this sort of sycophantic nature of some of these agents but I'm an optimist I think technology broadly moves society forward and can unburden us from you know repetitive and meal tasks and they will us to be more self-accual actualized so I do think it's important to worry about but I also think it's wrong to think it's an existential risk and I think we should worry about it mitigate those risks be smart with our kids and you know particularly kids in middle school and secondary school about when they get access to technology but I'm really optimistic for the benefits. Sam Altman you've spent some time with him as the board chair of OpenAI how does he operate what if you learn from him? Sam probably has the most ambitious vision of any founder that I've worked with and his superpower is aligning people to that vision. I was didn't have the good fortune of really knowing Steve Jobs what they all talked about the reality distortion field and why so many great engineers went and did great things like creating the Macintosh or creating the iPod and I see a lot of that in Sam. And what is what is his grand plan for OpenAI? What is the long-term potential there? To build AGI and ensure that it benefits humanity and it's always been the mission of the foundation and it still is and the but in that sentence office gets a lot of the challenges of doing so I just look at the even the capital requirements to do so which I don't think anyone knew when it was founded so I think the hard part Sam's doing now is taking that vision and mapping out a decade long plan to get there which is I think one of the most remarkable technical achievements in human history and it's exciting to be a part of it. One interesting dynamic of that business and Sam's challenge is it does seem that everybody just catches up real quick. It's absolutely right I mean that's just what I see going on right now sort of maybe ending where we started when I graduate from university I was in Stanford when the dot com bubble happened and then it burst in the middle of my undergraduate education. If you look at that period of the internet most people knew that the internet was going to be impactful and most people even knew the key applications like e-commerce and search that would be impactful and it was this cut throughout competition to decide who would win in those markets. If you remember Alta Vista which is sort of the number one. That's a big user. Yeah and then you had you know Yahoo and Excite is the portals and you had on bie.com like us you had bie.com and Amazon and every country had their own. I think we're just in a similar state right now you don't need to be have a PhD in artificial intelligence to think and say wow this is going to have a big impact on the economy and society. So you have all of the capital all the smart people the world all focused on the same thing. So this degree of competition is completely in my opinion expected. It means it's super stressful for those of us in the middle of it. It's great for the world though. I mean competition drives innovation at lower cost so I think it's just a great thing. If for those of us in the middle we don't get a lot of sleep because every day you wake up and there's new competition but that's what's great about the like free market technology economy is like at the other side of this is I think we're going to have some amazing tools that benefit humanity and I'm excited to be a part of it. But a lot of those early pioneers fell off. 100% that's just the way it works. I think there'll be a period of consolidation. Well that's also my joke. Your perspective on the.com bubble is very different if you went all in on bie.com versus Amazon. So you're going to have some companies go out of business I think more likely sort of be consolidated. I think there's probably I don't say too much capital but it's sort of being applied blindly to categories. It's definitely it's absolutely a bubble but I think it doesn't mean that there's not truly generational companies being created at the same time. I think both are true at the same time and you know that's why venture capital isn't for the weak of art and you can see some people do very poorly and some people writing their proverbial book about the great that's they made and you know that's the world I grew up in and I think it's exciting though my at least stressful times. Yeah what about Marissa Meyer? Marissa was my first boss. I probably learned the importance of people and hiring. I came in through a program she made at Google called the Associate Product Manager program where she hired new grads that have technical degrees and who wanted to become product managers and she said rather than getting an MBA, get an MBA at Google and a lot of the young people she recruited there ended up running big parts of Google running companies now but she spent just a lot of her time curating the people at Google I think was one of the greatest contributions to that company and I always remind myself you know it's like eating your vegetables if you want your company to be great two years from now focusing on the people you're bringing in now is probably the smartest thing and I always think about her when I do that. Cheryl Sandberg. Cheryl this is going to sound funny. Cheryl always gave me the like harshest best feedback like he was like whoa well we're not cut we're not like cut into the chase here aren't we and I realized that so much of my career hadn't been really given feedback and if someone actually cares about you the their willingness to actually tell you what you need to hear not what you want to hear is a gift and so I think it's very hard to give feedback because you think you think about the way it will make someone feel rather than thinking about you want them to be better at their career in the future so I learned that from her and she's she's amazing and I think she's a mentor to like half a Silicon Valley for a reason. Do we put Larry and Sergey together? I feel like people just say Larry Sergey. Well good Larry and Sergey together. Larry for me always focused on long term technology direction in a way that was remarkable. When I got to Google I had no idea why we were building our own data centers and it was turned out to be an incredibly important part of the cost to serve of Google when we were making everything from Google Maps to App Engine which became Google Cloud his focus on like setting it up architecturally to have sort of unfair advantages of scale and and it was remarkable just an incredibly long-term technical view. I had this run. I'm just going to ask what's your opinion of Elon Musk after your interactions with him? Probably the greatest entrepreneur of our time. He's a company he's created everything from SpaceX and look at the impact of Starlink, let alone Tesla and X so you know we've had some complicated interactions but sort of the undisputed leader and then that respect. Did you make a good choice buying X? I'm not very close to it so I haven't really followed it as much since since the transaction went through so I don't have a strong opinion on it. Okay I have learned not to ask people in your position to predict like the next five years but can you tell us what's going to happen over the next year? I think we will see a set of things like that math conjecture that's proven where society outside of the realm of like my social circle starts to acknowledge the impact that AI is going to have on science and I think that will in a good way change the positive perception of AI when we realize this can help perhaps over time discover cures to uncured diseases make breakthroughs in physics clean energy battery storage where we'll get out of the discussion of AI is a chatbot and the discussion of AI is something that's going to move society forward I'm really looking forward to that. Well Brett it's great that you came down here this is our first conversation I've been looking forward to it for a long time and I hope it's not our last so things again. All right everybody thank you for listening and watching and thank you to Qualcomm for having us here at your space at Davos. We'll see you next time on Big Technology podcast. Awesome. Thank you so much. Great stuff.